Bulk Buys: Iron ore hits astonishing $US230/t, upside remains2...

Bulk Buys: Iron ore hits astonishing $US230/t, upside remains
2 hours ago | Reuben Adams

Iron ore hit a heady $US230/t yesterday and, in the process, blew every expert forecast out of the water.

China loves a whinge, but right now they need our iron ore to feed their ravenous construction and manufacturing sectors.

Importantly, domestic steel prices and mills’ profit margins are still on a rising trend, Roskill says.

Meanwhile, steel production in the rest of the world is recovering after posting a near 8% year-on-year decline in 2020.

Iron ore prices have not only been pulled up by a strong demand and high steel prices, but supply, mostly from Brazil, has also been constrained.

There have also been a lot of fires.

The experts at Roskill reckon iron ore prices will continue to surprise to the upside.

“… iron ore supply will remain constrained for the rest of 2021 and possibly into 2022,” it says.

“In the next couple of years, China’s steel production will peak and with the development of Electric Arc Furnaces (EAFs), a decoupling between pig iron and steel production will take place.

“Softening steel prices in H2 2021 could also translate into lower iron ore prices, but overall Roskill believes that they will remain stronger for longer than market expected.”

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